ESG Disclosure in UCITS KIIDs
The Disclosure Regulation is considered by many a strategic regulation with long lasting effects for the fund management industry. Since its introduction, a great deal of attention has been paid to the implications of ESG Disclosures on the operations of fund managers, including a recent lengthy debate on the lack of specific guidance in the implementation due to the delay of the second level regulation.
A change in perspective was triggered recently with the introduction by the ESAs of templates for ESG Disclosures as well as the related advice issued by the SMSG on these templates. In a nutshell, the SMSG purports that retail investors are at risk of information overload with the templates in the form proposed. This could in principle also frustrate the aim of mitigating so-called greenwashing practices at the core of the Disclosure Regulation. At the same time, the SMSG seems to advocate for a more retail friendly way to present the ESG Disclosure, proposing that one single document is used to present retail investors with all relevant information, both financial and non-financial in nature.